Steel prices will remain weak

The recent domestic steel prices continued the pattern of weaker declines in the previous period. Affected by falling steel prices and continuously declining billet prices, market transactions did not improve. Merchants' prices kept stable, medium, and small. As of September 30, the price of HRB40020mm in the Shanghai market was 3440. Yuan/ton, which fell by about RMB 90/ton from the beginning of September. Steel factory price adjustment, construction steel manufacturers in the market price of the Yindie, upside down intensified in September, the ex-factory price in order to steady down in the main, which in ten-year pricing in East China Shagang, Yonggang and other steel mills in early September on the thread The ex-factory prices of steel and wire rods remained stable. In mid-term, the ex-factory prices of rebar and wire rods were all reduced by RMB 30/t, and the contract replenishment amounted to RMB 30-60/t in early September. The reduction in the ex-factory prices was further increased by the end of September. Dagang, Shagang and Yonggang have lowered their ex-factory prices for rebar and wire rod by RMB 50-80/t, and the latest ex-factory price of HRB40020mm rebar at Shagang is RMB 3580/t, and the price of Shanghai HRB40020mm rebar is approximately 130-150 yuan. /Ton. It can be seen that under the pressure of the organization's contract, although the steel plant has a greater pricing power, it can only follow the market price to lower the price in the case of a bad situation.

Second, the high output of the operation, the steel mills reduce production intensity. In August, the average daily output of crude steel in the country was 2,318,100 tons, an increase of 1.24% over the previous period, ending the three consecutive months of decline. According to the statistics of the China Iron and Steel Association, the average daily output of crude steel in September and mid-September is estimated to be 212.94 and 21.435 million tons respectively, which is up by 0.48% and 0.66% respectively. In general, steel production continues to remain high, and steel mills reduce their output. It is estimated that crude steel production will be between 7.7 and 780 million tons this year, an increase of about 8% from the same period of last year's output of 716 million tons, and domestic supply pressure will be greater.

In terms of inventory, according to statistics, on September 27, the social inventories of rebar and wire rods were 598.03 and 1.907 million tons respectively, which was 45% and 58% lower than the year-on-year highs in March, which was basically flat compared with the same period of last year, but The week-on-week decline has narrowed significantly. In mid-September, the inventory of key steel companies was 13.22 million tons, and the chain continued to show a rising trend in the end of September, rising slightly by 5.0%. On the whole, after the destocking process lasted for six months, steel stocks in the traditional peak demand season had only turned upwards and rebounded. This shows that the consumption of gold Jiuji or less than expected, the market confidence was frustrated.

In the end, downstream demand grew steadily, but it was lower than supply-side growth. According to the latest statistics from the National Bureau of Statistics, real estate development investment in August reached 781.8 billion yuan, an increase of 13.09% year-on-year, and an increase of 4.61% from the previous period. Among all sub-items, only the year-on-year growth rate and the quarter-on-quarter growth rate of the sales area were positive, which were 10.06% and 0.09%, respectively. The rest of the sub-items all declined, including the newly-started area and construction area year-on-year growth rate decreased by 20.14% and 24.82%, all set record lows for the year. In addition, from January to August, the cumulative growth rate of real estate development investment was 19.3% year-on-year, and it returned below 20% for the first time this year. In August, the national real estate development climate index was 97.29, which was a decrease of 0.1 points from the previous month. In terms of funds, real estate from January to August The funds invested by development enterprises reached 769.6 billion yuan, which represented a year-on-year growth rate of 28.9%, down 2.6 percentage points from the previous month.

However, from the fourth quarter, real estate risks are limited, and investment growth rate is likely to decline. Currently, the time for new housing inventory is about 11 months, which is slightly lower than the historical average. With the arrival of real estate gold nine silver and ten, sales should be Maintaining a relatively good pattern, the low start of new construction has determined that supply is relatively limited, and inventory is expected to decrease further.